UTAM, on behalf of the University of Toronto’s Pension Plan and Endowment, has joined 57 other investment organizations – representing approximately US $7.9 trillion in assets under management – in calling for the palm oil industry to adopt and implement publicly available No Deforestation, No Peat and No Exploitation (NDPE) policies.

The investors have endorsed a statement, “Investor Expectations on Sustainable Palm Oil,” which applies to companies across the palm oil value chain. The statement, released in April 2019, was coordinated by the Principles for Responsible Investment (PRI) with input from members of the PRI Investor Working Group on Sustainable Palm Oil.

Why was it important for us to support a statement on sustainable palm oil?

Globally, palm oil is the most widely used vegetable oil. Growth in demand has led to rapid, often poorly managed expansion in production, which has resulted in deforestation, an increase in greenhouse gas emissions, and the loss of biodiversity.

UTAM and its fellow signatories believe that environmental, social and governance (ESG) issues can affect the long-term financial performance of companies we invest in. Unsustainable palm oil production poses numerous environmental, social and reputational risks to companies in the industry, including issues related to deforestation, climate change, land rights and labour rights.

What do the investors expect from palm oil companies?

We expect companies’ NDPE policies to cover the following:

1) No deforestation

  • No conversion of High Conservation Value (HCV) areas;
  • No conversion of High Carbon Stock (HCS) forests;
  • No burning in the preparation of new plantings and re-plantings; and
  • A progressive reduction in greenhouse gas emissions associated with existing plantations.

2) No development on peat

  • No development on peat regardless of depth;
  • Implementation of Roundtable on Sustainable Palm Oil (RSPO) Best Management Practices for existing plantations on peat; and
  • Where feasible, explore options for peat restoration.

3) No exploitation of people and local communities

  • Respect and support the Universal Declaration of Human Rights;
  • Respect and uphold the rights of all workers including contract, temporary and migrant workers;
  • Facilitate the inclusion of smallholders into the supply chain;
  • Respect land tenure rights;
  • Respect Free Prior and Informed Consent (FPIC) of indigenous and local communities; and
  • Resolve all complaints and conflicts through an open, transparent and consultative process.

Read the Full Statement